You don't have to be super rich, or even just rich, to set up a trust to protect your assets for yourself or your loved ones. An attorney can help you establish a fairly straightforward trust for a fee in the range of $200 to $2,000, though more complex trusts can be expensive to set up. Why bother? Because there may be advantages to having assets owned by a trust rather than owned by you as an individual. Although a well-drafted will probably serves the bequest needs of most people, trusts are an option worth exploring. A great resource to help you get started is the National Association of Financial and Estate Planning (www.nafep.com). Also check out the Wills and Estate Planning resource at www.nolo.com. Here are some widely used trusts: Revocable trust. As the name indicates, with this trust you have maximum flexibility. If you want, you can shift assets into it, cancel the arrangement, and take them back out. You control the trust fund and collect any investment income. The main advantage to this trust is probate avoidance. At your death, trust assets go directly to your heirs without a court overseeing the process. Also, you're protected in case you become incapacitated. Someone you've named as a trustee will step in and manage the trust fund on your behalf. Irrevocable trust. You can't take out assets once they go into this type of trust. Your spouse, children, and other loved ones can be among the beneficiaries, so they can receive money from the trust fund. Trust assets also may be out of reach of your creditors. IRA trust. When you have an IRA, you need to name a beneficiary. You may be concerned, though, that a large IRA will be mismanaged. "One solution is to name a trust as the beneficiary of your IRA," says Ed Slott, a CPA in Rockville Centre, New York, who publishes Ed Slott's IRA Advisor newsletter. "Then the person whom you'd like to inherit the IRA can be the trust beneficiary." But take caution: Such a trust must be structured carefully, Slott says. If the trust is drafted properly, IRA distributions can be stretched out over the beneficiary's life expectancy, deferring income tax and generating considerably more wealth. Family, or Credit Shelter, trust This type of trust is commonly used by married couples. The first spouse to die leaves assets to the trust; the amount can be as much as the federal estate tax exemption allows, which is $2 million in 2008. Beneficiaries may include the surviving spouse and the couple's children. This trust is also called a bypass trust because estate tax is bypassed altogether. At the death of the first spouse, the bequest is sheltered by the estate tax exemption. The trust assets may not be included in the survivor's estate so they won't be taxed at the death of the second spouse either. Marital trust. After the first spouse's death, assets that don't go into a family trust can go into a trust for the surviving spouse. Any asset amount can go into such a trust, free of estate tax. QTIP (qualified terminable interest property) trust. This is a special type of marital trust. After the death of the first spouse, assets going into a QTIP trust can only be distributed to the surviving spouse, who gets all the trust income. Therefore, no estate tax is due on QTIP assets at that time. At the death of the second spouse, estate tax may be owed. However, any assets left in the QTIP trust go to a beneficiary named by the first spouse to die. Thus, QTIP trusts are especially popular among remarried couples. James Smith, as we'll call him, can provide for his second wife, Denise, via a QTIP trust; but James can stipulate that the trust fund eventually will go to his children from his first marriage, not to Denise's kids or to her annoying younger brother. CHECKLIST The following list of conditions may help you determine if a trust would be right for you. You have sizable assets. You want your estate to be payable to your heirs upon their meeting certain conditions, such as graduating from college, not necessarily immediately after your death. You have a disabled relative you would like to provide for without disqualifying that person from Medicaid or Medicare. You want to reduce estate and gift taxes. You want to protect your assets from creditors and lawsuits. You'd like to ensure that the principal or remainder of your estate goes to your children or other heirs after your spouse dies. You'd like to maximize estate tax exemptions for yourself and your spouse.